Question 1

Using tax software will not save a taxpayer any time when preparing Form 1040.

Accepted Answer

A) True 
 B)False

Question 2

When Marissa completes her taxes, she can include her qualified dependent children, her husband, and herself as exemptions.

Accepted Answer

A) True 
 B)False

Question 3

In 2014, the U.S. federal tax tables included tax rates of

Accepted Answer

A)  0%, 10%, 20%, 30%, 40%, and 50%. 
B)  7%, 15%, 30%, 33%, 38%, and 52%. 
C)  0%, 25%, 50%, and 75%. 
D)  10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. 
E)  0%, 5%, 20%, 30%, and 50%. 
A)  0%, 10%, 20%, 30%, 40%, and 50%. 
B)  7%, 15%, 30%, 33%, 38%, and 52%. 
C)  0%, 25%, 50%, and 75%. 
D)  10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. 
E)  0%, 5%, 20%, 30%, and 50%.

Question 4

In 2014, taxable income was reduced by ______ for each exemption claimed.

Accepted Answer

A)  $1,000 
B)  $2,500 
C)  $3,950 
D)  $5,000 
E)  $10,000 
A)  $1,000 
B)  $2,500 
C)  $3,950 
D)  $5,000 
E)  $10,000

Question 5

Most states do not require state income taxes.

Accepted Answer

A) True 
 B)False

Question 6

Determining adjusted gross income is the final step in calculating federal income tax.

Accepted Answer

A) True 
 B)False

Question 7

All of the following can reduce your taxes today except investing in

Accepted Answer

A)  Municipal bonds. 
B)  A tax-deferred annuity. 
C)  A Section 529 savings plan. 
D)  A 401(k) plan. 
E)  A Roth IRA. 
A)  Municipal bonds. 
B)  A tax-deferred annuity. 
C)  A Section 529 savings plan. 
D)  A 401(k) plan. 
E)  A Roth IRA.

Question 8

David thinks that his salary and tax rate for next year will be higher than for this year. What step should he take minimize taxes over the period this year and next year?

Accepted Answer

A)  Delay receipt of income. 
B)  Delay filing taxes. 
C)  Accelerate receipt of income. 
D)  Accelerate deductions. 
E)  None of these will allow him to minimize his taxes. 
A)  Delay receipt of income. 
B)  Delay filing taxes. 
C)  Accelerate receipt of income. 
D)  Accelerate deductions. 
E)  None of these will allow him to minimize his taxes.

Question 9

A worker's primary goal should be to

Accepted Answer

A)  Pay his or her taxes using estimates for income and deductions. 
B)  Pay no income taxes. 
C)  Pay the average tax rate for people working in his or her industry. 
D)  Pay his or her fair share of taxes while taking advantage of appropriate tax benefits. 
E)  Pay no taxes of any type. 
A)  Pay his or her taxes using estimates for income and deductions. 
B)  Pay no income taxes. 
C)  Pay the average tax rate for people working in his or her industry. 
D)  Pay his or her fair share of taxes while taking advantage of appropriate tax benefits. 
E)  Pay no taxes of any type.

Question 10

Income that is not subject to tax is called

Accepted Answer

A)  Adjusted gross income. 
B)  Earned income. 
C)  Passive income. 
D)  Tax-deferred income. 
E)  Tax-exempt income. 
A)  Adjusted gross income. 
B)  Earned income. 
C)  Passive income. 
D)  Tax-deferred income. 
E)  Tax-exempt income.

Question 11

Using the following table, calculate the taxes for an individual with taxable income of $20,800. $$\begin{array} { l r } 
10 \% & \text { Up to } \$ 8,500 \
15 \% & \$ 8,500 - \$ 34,500 \
25 \% & \$ 34,500 - \$ 83,600 \
28 \% & \$ 83,600 - \$ 174,400 \
33 \% & \$ 174,400 - \$ 379,150 \
35 \% & \text { Over } \$ 379,150
\end{array}$$

Accepted Answer

A)  $850. 
B)  $2,695. 
C)  $5,175. 
D)  $6,025. 
E)  $20,800. 
A)  $850. 
B)  $2,695. 
C)  $5,175. 
D)  $6,025. 
E)  $20,800.

Question 12

All individuals with taxable income are subject to the AMT calculation.

Accepted Answer

A) True 
 B)False

Question 13

Gross (or total) income includes

Accepted Answer

A)  Exclusions. 
B)  Tax deductions. 
C)  Tax-deferred income. 
D)  Passive income. 
E)  Tax-exempt income. 
A)  Exclusions. 
B)  Tax deductions. 
C)  Tax-deferred income. 
D)  Passive income. 
E)  Tax-exempt income.

Question 14

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

Accepted Answer

A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate. 
A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate.

Question 15

The tax based on the total tax due divided by taxable income is called the

Accepted Answer

A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate. 
A)  AMT. 
B)  Average tax rate. 
C)  Income tax rate. 
D)  Marginal tax rate. 
E)  Total tax rate.

Question 16

A tax credit has a full dollar effect in lowering taxes.

Accepted Answer

A) True 
 B)False

Question 17

A taxpayer less than 65 years old can only deduct medical and dental expenses greater than 10% of AGI for 2014.

Accepted Answer

A) True 
 B)False

Question 18

The maximum amount that an individual can give another in a year without being subject to estate taxes is

Accepted Answer

A)  All gifts are taxable. 
B)  $10,000. 
C)  $14,000. 
D)  $15,000. 
E)  No gifts are taxable. 
A)  All gifts are taxable. 
B)  $10,000. 
C)  $14,000. 
D)  $15,000. 
E)  No gifts are taxable.

Question 19

If your tax payments are less than the amount of income tax you owe, you are entitled to a refund.

Accepted Answer

A) True 
 B)False

Question 20

If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced?

Accepted Answer

A)  $25 
B)  $50 
C)  $250 
D)  $500 
E)  $1,000 
A)  $25 
B)  $50 
C)  $250 
D)  $500 
E)  $1,000

Using tax software will not save a taxpayer any time when preparing Form 1040.

When Marissa completes her taxes, she can include her qualified dependent children, her husband, and herself as exemptions.

In 2014, the U.S. federal tax tables included tax rates of

In 2014, taxable income was reduced by ______ for each exemption claimed.

Most states do not require state income taxes.

Determining adjusted gross income is the final step in calculating federal income tax.

All of the following can reduce your taxes today except investing in

David thinks that his salary and tax rate for next year will be higher than for this year. What step should he take minimize taxes over the period this year and next year?

A worker's primary goal should be to

Income that is not subject to tax is called

Using the following table, calculate the taxes for an individual with taxable income of $20,800. 10\% Up to \ 8,500 15\% \ 8,500-\ 34,500 25\% \ 34,500-\ 83,600 28\% \ 83,600-\ 174,400 33\% \ 174,400-\ 379,150 35\% Over \ 379,150

All individuals with taxable income are subject to the AMT calculation.

Gross (or total) income includes

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

The tax based on the total tax due divided by taxable income is called the

A tax credit has a full dollar effect in lowering taxes.

A taxpayer less than 65 years old can only deduct medical and dental expenses greater than 10% of AGI for 2014.

The maximum amount that an individual can give another in a year without being subject to estate taxes is

If your tax payments are less than the amount of income tax you owe, you are entitled to a refund.

If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced?

Personal Financial Planning in Action

Money Management Skills

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 3: Taxes in Your Financial Plan

Using tax software will not save a taxpayer any time when preparing Form 1040.

When Marissa completes her taxes, she can include her qualified dependent children, her husband, and herself as exemptions.

In 2014, the U.S. federal tax tables included tax rates of

In 2014, taxable income was reduced by ______ for each exemption claimed.

Most states do not require state income taxes.

Determining adjusted gross income is the final step in calculating federal income tax.

All of the following can reduce your taxes today except investing in

David thinks that his salary and tax rate for next year will be higher than for this year. What step should he take minimize taxes over the period this year and next year?

A worker's primary goal should be to

Income that is not subject to tax is called

Using the following table, calculate the taxes for an individual with taxable income of $20,800. 10\% Up to \ 8,500 15\% \ 8,500-\ 34,500 25\% \ 34,500-\ 83,600 28\% \ 83,600-\ 174,400 33\% \ 174,400-\ 379,150 35\% Over \ 379,150

All individuals with taxable income are subject to the AMT calculation.

Gross (or total) income includes

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes is called the

The tax based on the total tax due divided by taxable income is called the

A tax credit has a full dollar effect in lowering taxes.

A taxpayer less than 65 years old can only deduct medical and dental expenses greater than 10% of AGI for 2014.

The maximum amount that an individual can give another in a year without being subject to estate taxes is

If your tax payments are less than the amount of income tax you owe, you are entitled to a refund.

If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced?

Personal Financial Planning in Action

Money Management Skills

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters